Help Please! Deep in debt!

lozza1013

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1400
Partners monthly income after tax....... 0
Benefits................................ 140
Other income............................ 0
Total monthly income.................... 1520
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 675
Management charge (leasehold property).. 0
Council tax............................. 130
Electricity............................. 40
Gas..................................... 40
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 11
Mobile phone............................ 25
TV Licence.............................. 11
Satellite/Cable TV...................... 0
Internet Services....................... 12
Groceries etc. ......................... 300
Clothing................................ 20
Petrol/diesel........................... 25
Road tax................................ 10
Car Insurance........................... 26
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 20
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 20
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 15
Haircuts................................ 0
Entertainment........................... 30
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1440

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 200
Other assets............................ 400
Total Assets............................ 600

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
mbna...........................6000......140.......18.9
nationwide.....................3500......105.......18
lloydstsb......................2000......30........14.9
catalogue......................350.......30........0
loan...........................7500......175.......10.9
lloydstsb......................1000......20........16.9
Overdrafts 8000 130
Total unsecured debts..........20480.....630.......-

Monthly Budget Summary
Total monthly income.................... 1,520
Expenses (including HP & secured debts). 1,440
Available for debt repayments........... 20
Monthly UNsecured debt repayments....... 630
Amount short for making debt repayments. -530
Personal Balance Sheet Summary
Total assets (things you own)........... 600
Total HP & Secured debt................. -0
Total Unsecured debt.................... -20,350
Net Assets.............................. -19,750

Hi There,

I am new to this board although have been reading other peoples posts for months now. Have finally built up the courage to sit down and sort out my debts.

I have attached my SOA (hope I have attached it ok!)...not looking too good! I knew things were bad but not quite this bad.

I have a couple of questions, I have just been offered a new job to start at the end of aug which should up our income by roughly £500 after childcare which is great and feels like a step forward although looking through my SOA this is only just going to cover our shortfall.

Can myself and partner still offer reduced payments to our creditors despite our joint income increasing- most of the debts are in his name so would my income be taken into account? - We are willing to go back to normal payments once we have got on our feet again but for the foreseeable future (next 6 months at least) we could really use just paying reduced payments. Would this be possible?

Thanks, Lozza

RAS

Hi

Welcome.

Not going to comment much but..

Please have a look at www.entitledto.com and see what extra benefits you should be getting now and in the future. it look to me like you should have a much higher income.

And you can cut that grocery bill down to £200 without any harm.

Do you REALLY, REALLY need a car?

brians_daughter

welcome!!

lots of folks wil be able to help! 1st thing i see is grocery shopping £300 this can be cut back.. try going down a brand you would be suprised on how much you save. plan you meals etc. I feed 4 of us inc school dinners etc on £180 pcm. and we do eat well on that! Just a matter of planning and freezing and sticking to your meal plan

are you on best rates for gas/elec?

Afraid entertainment has to go.. for now anyway

Have you tried arranging a plan with creditors for the next 6 months or so?

Can you not move cc's to 0% balance transfers? obv depends on credit rating

entitled to for checking you are getting everything you are entitled to

your benefit states £60, with 1 child your cb alone would be at least £80......

brians_daughter

also, considering you only spend £25 on fuel can you not do without a car? that would save over £60 - but you need to factor in other travel costs here

lozza1013

Hi,

Thank you for your replies, we both have a terrible credit rating a the moment and can't get any credit, because I have been at home with our daughter for two years and not working its made getting credit impossible.

I have just realised on the benefits side of things I forgot to put down child benefit which is an extra 80 pounds. We were receiving WTC but these got stopped in April due to overpayment apparently which meant we weren't entitled to any this year (was thanking god though that we didn't have to pay any back.)

Definitely need a car (for my partner) he uses his car for work (although has been hankering after a company van for over a year now with no luck).

Entertainment what little of it we have will go as will budgeting for groceries. I find I am fine with the weekly shop its the odd trip into town and top up shops that I suffer with...spending too much so will definitely look into that.

Am just about to write creditor letters, what do we do though just cancel the DD and wait to hear back. Should our reduced payment be made at the time that we normally pay even if they haven't got back to us?

Sorry for so many questions! I'm on a roll!

brians_daughter

always best to be upfront with creditors. many may not actually do anything until you miss a payment but if you call up and say we are experiencing difficulties i cant afford payments but i can afford x, and in x i get a pay rise so can re-assess then and see what they say. some will say tough until you miss a payment but i have always found being upfront usually means they are aware of situ and you are co-operating and not just burying head in sand! Some will re-asses in 12 months automatically. if you can secure reduced payments 'arrangements to pay' they can stop interest as well, so you can pay off quicker.

I have just arranged with MBNA to arrangement to pay my cc. I was paying £130 pcm, now i pay £49 and they stopped all interest and late payment fees etc

theres a snowball calculator somewhere that shows you how long til debt free, but st lets concentrate on getting debt to manageable levels!

talana

When rent/mortgage + council tax alone account for over 50% of your income, then alarm bells should start sounding I think.

I don't know where you are in the country, but can you not move to a cheaper place?
What are your £400 in other assets? Something that can be easily cashed in or not?

Crazy_Diamond

You mentioned that your partner needs a car for work but you have not included his income on the form. Is there a reason for this?

lozza1013

Crazy_Diamond wrote: »

You mentioned that your partner needs a car for work but you have not included his income on the form. Is there a reason for this?

Ooh yes, just seen that too, I meant to put it in the next box down as partners income. I am currently not earning (although will start employment this month- 500 pounds a month after childcare).

lozza1013

talana wrote: »

When rent/mortgage + council tax alone account for over 50% of your income, then alarm bells should start sounding I think.

I don't know where you are in the country, but can you not move to a cheaper place?
What are your £400 in other assets? Something that can be easily cashed in or not?

we are down in Devon - have been looking for cheaper places but to be honest there doesn't seem to be anything else cheaper around. The alarm bells have been ringing for a while, but we have always just scraped through each month whereas this month its just completely caught up with us.

I also need to revise my SOA unfortunately as I completely forgot about overdrafts - we have 3 current accounts - one joint and two individual...both of these are maxed out totalling 8K.

I think i am going to have to get a second job!

lozza1013

brians_daughter wrote: »

always best to be upfront with creditors. many may not actually do anything until you miss a payment but if you call up and say we are experiencing difficulties i cant afford payments but i can afford x, and in x i get a pay rise so can re-assess then and see what they say. some will say tough until you miss a payment but i have always found being upfront usually means they are aware of situ and you are co-operating and not just burying head in sand! Some will re-asses in 12 months automatically. if you can secure reduced payments 'arrangements to pay' they can stop interest as well, so you can pay off quicker.

I have just arranged with MBNA to arrangement to pay my cc. I was paying £130 pcm, now i pay £49 and they stopped all interest and late payment fees etc

Thanks for your reply, thats good to know re: MBNA - as this is one of our biggest debts and I had heard they are often quite tough on you. Can you do this via letter?